It’s human nature to compare performance relative to your immediate rivals, worrying who’s faster, stronger, bigger, better. But what if you’re so busy worrying about your direct competition that you lose sight of the bigger picture?
Because latest business intelligence from BAV Singapore has identified entire categories in which brands are becoming increasingly irrelevant. Caused variously by hyper commoditisation, low differentiation, decreasing relevance and reducing loyalty, brands in these categories can only distinguish themselves by pricing and availability.
Identified by comparative data from the last 10 years, using Y&R’s proprietary Brand Asset Valuator business intelligence, these at-risk categories include Department Stores, Insurance, Banks, Beauty Companies, Newspapers and Alcoholic Beverages. Over the decade, brands in these segments are losing power to attract and retain consumers, leaving them unable to charge a premium for their products.
This spells an immediate need for at-risk brands to look beyond the confines of their own category. Brands must look to those sectors that are leading in relevancy and trust among Singaporeans, and see what good practice can be applied to avoid the risk of becoming irrelevant.
BAV 2017 shows categories such as Education Institutions, Payments Solutions, Chocolates, Mobile Phones and computers are leading the way. Consumers are excited about brands from these categories because they’re constantly offering something new and exciting, while continuing to stay relevant and trustworthy.
If brands from the at-risk categories had learnt from leaders in other categories early on, they may not be facing commoditisation today. It’s not enough to look at your brand purely in relation to your direct competitors, brands need to understand where they stand in relation to other categories.
Even if a brand tries to be the best and lead in its own category, it would still rank lower than other brands for consumers. In the category-neutral minds of consumers, such a brand would need to spend extra media dollars just to compete with the brands that are trailing in leading categories, which is ineffective marketing economics. And it doesn’t solve the larger issue of commoditisation, if the comparative set was from the same category.